Purdy council proposes higher water, sewer rates

Wednesday, June 19, 2019

Significant increases needed to cover contracts, debts

For nearly four years, Purdy city officials have spoken publicly about pending steep hikes in their sewer bills to pay for the sewer pipeline project to Monett.

Even after the successful bond issue vote in April 2016, city council members held the same rates.

Now that the project has been completed, the new budget for fiscal year 2019-2020, beginning July 1, at long last revealed the cost, as aldermen last week agreed on steep increases in both water and sewer rates to pay for infrastructure upgrades.

Clerk Debbie Redshaw unveiled the depth of the problem in a balanced budget proposal.

To make payments on the city’s loans received to help fund the pipeline project, plus maintenance, the city would need to raise its sewer rates $36 per customer. Sewer rates have not been increased since 2013.

In addition, water rates, with the conversion of the city’s system to electric meters and upgrades in a lease contract with Utility Services, needed to rise by $11 per customer. Redshaw budgeted $10,000 in for repairs and maintenance to the water system. Water rates have not changed since 2011.

Alderman Bob Mosier, who lives alone, calculated that as a customer paying the minimal usage rate, his combined water and sewer costs would increase from approximately $50 to $97.

A typical rate, based on using 5,000 gallons of water and sewer, would set a cost of $45 for water use, up from $30.50, and $70 for sewer use, up from $40. That put the combined cost at $115, up approximately 53 percent.

Former Mayor Steve Roden wrestled in negotiations with DNR to determine how much Purdy residents should pay for sewer service. To qualify for federal assistance, the city had to charge what was equivalent to 2 percent of the mean household income. Roden argued over what that amount translated into dollars. A survey was even done to document that 2 percent would run lower than estimates, putting the amount around $42. The revised billing formula topped that.

Purdy has approximately 66 customers paying the minimum water rate, and likely a similar number paying the minimum sewer fee. The city has 479 water customers, with approximately 100 of those outside the city limits and paying a higher rate. The city has 379 sewer customers, only two of which live outside the city limits, but pay the same rate. The city has 16 businesses with higher usage.

The city council showed no pleasure in having to jump rates so high all at once. Mayor Bo Prock fully anticipated a full house at next month’s council meeting. He directed Redshaw to prepare ordinances for passage at that time, detailing a breakdown on the new charges.

Council members settled on different charges for inside-the-city and outside customers. They decided to raise the base rate for the first 1,000 gallons from $16.50 to $25, then, instead of charging $3.50 for each additional 1,000 gallons, that price would rise to $5.

Water customers living outside of the city, currently paying $35.75 for the first 1,000 gallons of water — double the city rate — could expect to see that amount rise to $45.75. Each subsequent 1,000 gallons would increase from $3.50 to $8.50.

“We should have been raising water rates all along,” Redshaw said. “By the third year [when payments start on the principle portion of the bonds, deferred for the first two years], the rate will have to be even more for sewer.”

Mosier, recalling an earlier conversation with engineers about the Missouri Department of Natural Resources (DNR) squeezing small towns that had fallen out of compliance with their wastewater operations. Most, the engineers said, were looking to see what would happen to Purdy as a template for what would happen to them next, largely because DNR was trying to eliminate lagoon wastewater system, a common direction in southwest Missouri. Prock said he was simply grateful that Purdy was located so close to Monett that a pipeline solution was possible.

Mosier suggested the pipeline ought to be renamed “DNR’s Big Mistake” because it wasn’t needed in the first place. For the past 10 years, DNR pressed the city for a solution to the lagoon system’s inability to reduce the nitrates in its effluent.

Lonnie Lowery, Purdy’s public works superintendent, said the problem with DNR goes even deeper. Under the new sewer arrangement, the city’s west lagoon was taken out of service, pushing all the effluent to the east lagoon. The capacity of the east lagoon was supposed to handle the volume, but with the recent rains, that has proven inadequate.

Purdy has an agreement with the city of Monett to pump a limited amount of effluent daily, a peak higher than the calculated average production. Spring rains added to that. Lowery said the city has approximately eight hours of pumping potential to Monett. The system was kicking in at midnight and turning off at 8 a.m.

Lowery hoped to pull the lagoon volume down with time. When the volume kept rising, Purdy began paying Monett an overage charge to keep the east lagoon within its limits. He blamed DNR for eliminating the west lagoon’s storage capacity, creating a problem that previously did not exist.

“Our agreement with Purdy states that any amount over 200,000 gallons per day results in a surcharge of $1.06 per 1000 gallons,” said Skip Schaller, Monett’s utilities superintendent. “That is 40 percent of the Monett City rate. We have billed them for April for 3,290,760 gallons of surcharge for $3,488.21.”

Schaller had not seen the bill to Purdy for May usage at the time of his comment. Because of the volume of rain, he expected the charge would be similar.

“Purdy has some major I&I issues [inflow and infiltration of stormwater runoff into the sanitary sewer system] and small rains have made for large amounts of flow in their system,” he said. “Our contract is set up to protect Monett from being swamped with I&I from Purdy. They have been trying to set their pumps around 200,000 gallons a day to stay under the surcharge, but the large rains a week or so ago put them in a tough spot. It was rough stretch for most of the treatment plants in the area. Ground was very saturated.”

Lowery said results from the latest smoke tests on Purdy’s sewer lines to find leaks had not yet come back from Ace Pipe Cleaning. He also knew the city’s engineering firm, Allgeier, Martin and Associates, sent a crew to the city to seek and assess several hidden manholes that had been buried for their leakage capacity. He had no word on that effort either.

Prock observed that once the city’s water system recovered to where 85 percent of the water pumped reached meters, the system “would pay for itself.” At present, efficiency runs around 65 percent.

Redshaw added to that discussion, noting that when the city agreed to sign a service deal with Utility Services, replacing all the city water meters with electronic meters, the company representative said actual measurements would produce higher revenues. Water meters are known to slow over time.

However, Redshaw said she had seen no improvement in the efficiency due to the new meters. An informal review of water customers in the room produced no noticeable increase in water bills since the new meters going into service in December 2017. Redshaw wondered whether the Utility Services representatives had oversold the benefit of their product. The 20-year water program costs $95,000 a year, with the cost dropping after the seventh year.

“In my opinion, our water loss is going of the the water lines and into the sewer,” Prock said.

Lowery said the amount of water reaching meters, compared to the amount pumped, had risen significantly over the past year as he and his staff had begun tearing out chronically leaking and frequently patched sections of pipe altogether and replacing them. He was hopeful that replacing one more chronically leaking water hydrant could boost efficiency to more than 75 percent. Beyond that point, he saw only small issues in the system to address.

Aldermen adopted Redshaw’s proposed budget, showing revenue would match expenses. The new rates hammered out in discussion had not been run through calculations to determine if the new fees would generate enough to cover the costs. Council members agreed to implement the new base rates and charges for additional volume, subject to adjustment once they saw the revenue totals.

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